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tive convenants) should stand,” says Matt
Setzkorn, OFT’s policy co-ordinator.
The conservation body doesn’t necessarily
have to buy the land, as it did in
the Jenkins case. More often landowners
decide to have a conservation easement
placed on their land because they want
to ensure the ecologically sensitive or
agricultural features of their property
will remain protected after the property
is sold or transferred.
The landowners may also be motivated
by tax credits. The difference in
value of the property before and after
a conservation easement is the value of
the donation receipt to which the landowner
is entitled. This may also reduce
the municipal property tax assessment,
although this must be pursued individually
with property tax officials.
Not all easements qualify as ecological
gifts. For a donation of a conservation
easement, common-law covenant or
full title to be an eco-gift, Environment
Canada must certify that the land is ecologically
sensitive and it must also certify
a fair market value for the donation. For
more information on the Ecological Gifts
Program, contact Environment Canada
at www.ec.gc.ca.
As of June 2006, landowners in
Alberta had donated or sold conservation
easements covering about 74,000
acres and donated or sold fee simple title
covering about 100,000 acres to conservation
organizations. Of these lands
47,000 acres qualified as ecological gifts
valued at about $42 million.
“The property value usually is lowered
with these easements and for that
change in value you can get a tax credit,
if your property is deemed to have special
qualities,” says Jennifer Stevenson,
business adviser with the Ontario Agriculture
Ministry. “Anything above the
capital gains tax exemption, you get
extra tax credits.”
The tax benefits of a conservation
easement can sometimes be used to help
with farm succession. The process also
forces families to talk about a vision for
the property and try to match that with
personal wants and needs.
“An agricultural conservation easement
is also a tool for succession planning
as it provides a formal agreement
outlining provisions to ensure that one’s
land may provide a specific use for
future generations,” says Stevenson.
When the Jenkins began negotiating
with the NCC they hired a good lawyer
who had previously worked with conservation
easements. “Get a lawyer experienced
with conservation easement to set it
up properly,” Jen recommends.
Covenants usually are negative, not
allowing for particular activities or land
uses. For example, a covenant might
prevent subdivision of the property or
require that the property be used for
farming only, or not allow the removal
of certain vegetative species within designated
natural zones.
Since they were already using good
land stewardship practices, the Jenkins
didn’t have to change how they operated
their ranch.
Jen and Bob maintain control of
how the land is grazed and subsequently
many other area ranchers now have
agreements with the NCC. Some of them
are based on purchases, as with the Jenkins,
while others are based on conservation
easements. Today the Waterton
Park Front project is one of the largest
private land conservation initiatives in
Canada, conserving over 30,000 acres of
ranchland.
Covenants can also allow activities
such as responsible forestry, usually
according to a named set of practices
or a management plan attached to the
easement. The easement portion of the
agreement grants to the holder, among
other things, access for the purpose of
inspecting the property and the right to
take action to remedy any deficiencies.
It also usually outlines terms such as
giving notice of inspection to the landowner.
Jen works well with the two or three
NCC staff in the area and over the years
has partnered with the NCC to do a few
conservation projects, such as fencing
riparian areas.
Bob and Jen own everything on the
land, such as the houses. There are three
family homes on the ranch. One concession
they made to the family was that
the descendants could come back, use
their family homes any time and enjoy the
property, ride horses or go for a walk.
That agreement has worked out fine
but Jen’s ability to build a home for
herself to replace her mobile home is
curtailed.
There’s another hitch too. Ownership
of capital assets wasn’t something Jen
thought would be important when she
was younger.
However, loaning agents want land
as collateral. “I didn’t see that it would
leave me with little borrowing power,”
says Jen.
Normally they would have managed
through this limitation but May 2003
changed everything. During the winter,
Jen and Bob had bought 100 cow-calf
pairs intending to resell them after grassing
them over the summer. When the
border shut down because a Canadian
animal tested positive for bovine spongiform
encephalopathy (BSE), suddenly
those cows were worth nothing.
And all their cash flow was tied up in
cattle. “All our cash had gone back into
building the herd,” says Jen.
Once the shock had settled, Jen
gathered her financial information and
invited her banker out to the ranch to
talk about a bridging loan. She poured
out her story. “Then he said I should
evaluate what I wanted to do and suggested
I get a job at Walmart.”
Now spurred on with a little anger,
she called a senior economist from
Alberta Ag and got some good advice.
She went back to the books and did five
years of full budgeting and presented
it to two other banks with no luck. “It
forced me to step up my game,” she says.
Finally Jenkins went into Lethbridge
to meet with FCC. “I’ll always remember
that moment,” she says. “He met me
with optimism, and said it was going to
get better.”
Now she figures it’s time to give that
positivity back to other new farmers.
She’s recently started acting as a facilitator
for FarmOn (www.farmon.ca).
Her role there is to listen, let farmers
know they are not alone and help them
set up a team of people and information
to get them through their challenges.
Her services are free and she has a large
resource board behind her who help connect
to the resources.
“Often we’re trying to do it all, financial
management, marketing, production,
ownership, human resources,” Jen
says. “Sometimes it’s a matter of letting
someone else help you and it doesn’t necessarily
cost a bundle.”
Jen started her online connection
with a woman’s group. These online
chats and conferences led her to the
FarmOn site. “I want to facilitate people
building the future of agriculture,” Jen
says. “I know what it feels like to be
alone trying to make a go of it. I’m there
to listen, online.” CG
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